Home Stock list Russia’s Sberbank expects return on equity above 20% in 2022-2023

Russia’s Sberbank expects return on equity above 20% in 2022-2023

5
0

MOSCOW, Dec.15 (Reuters) – Russia’s largest lender, Sberbank (SBER.MM), targets return on equity (RoE) of over 20% in 2022-2023 and may sell or list some of the companies of its larger portfolio, CEO German Gref said Wednesday.

The bank, alongside other Russian companies including Yandex (YNDX.O) and Tinkoff (TCSq.L), is developing a so-called ecosystem of services beyond its core business, which Sberbank says is necessary to fight against the contraction of the margins of traditional banks.

Gref said the compound annual growth rate of revenue from its non-financial businesses, which includes e-commerce, cybersecurity and cloud services, was over 100% in 2020-23.

Register now for FREE and unlimited access to reuters.com

Register

He said strong competition from Yandex had boosted Sberbank in its ecosystem push and told an Investor Day that there were no immediate plans to expand the company’s portfolio internationally, keeping the focus on Russia.

“We are limiting the scope of what we do, we have defined a number of businesses for sale and have already started selling or have sold some of them,” he said. “Some companies that we will take to the exchange.”

The bank’s RoE, a key measure of profitability, is forecast at 23% in 2021, but in forecast 2022, Sberbank said it will simply be above 20% next year. Net profit in 2021 is estimated to be around 1.2 trillion rubles ($ 16.2 billion), which would be a record for the lender.

Sberbank expects business lending growth of 7-10% next year, in line with the industry, and expects to outpace the personal lending industry’s 10-12% growth, said CFO Alexandra Buriko, speaking alongside Gref.

She said Sberbank was sticking to its plan to pay out 50% of net profit in dividends.

The lender’s average net interest margin would be around 5.2% in 2022, Sberbank said. Gref said the bank expects Russia’s key interest rate to be 8% in 2022 before dropping to 5.25% in 2023. Sberbank predicts 2022 inflation of 4.5%.

The central bank is expected to raise its policy rate by 100 basis points to 8.5% at a rate-setting meeting on Friday. Read more

($ 1 = 74.0870 rubles)

Register now for FREE and unlimited access to reuters.com

Register

Reporting by Alexander Marrow; Additional reporting by Andrey Ostroukh and Olzhas Asezov Editing by David Goodman, Kirsten Donovan

Our Standards: Thomson Reuters Trust Principles.


Source link